DAVOS, SWITZERLAND — Reducing supply chain barriers to trade, such as border administration and transportation and communications infrastructure, could sharply boost global production and trade, a report by the World Economic Forum said.
Lowering such impediments to global commerce would also help lower costs to companies, including in the textiles and apparel sector, and ultimately lower consumer prices, said the study, released here Wednesday at the WEF annual summit.
The report, “Enabling Trade: Valuing Growth Opportunities,” compiled in collaboration with Bain & Co. and the World Bank, estimates that reducing supply barriers even 50 percent to the world’s best practices could increase world gross domestic product 4.7 percent, or $2.6 trillion, and exports 14.5 percent, or $1.6 trillion.
It also highlights, through 18 case studies, that removing barriers that companies face can enhance competitiveness.
“Eliminating supply chain barriers eliminates waste for companies,” said Mark Gottfredson, a partner at Bain & Co.
Gottfredson said red tape is one barrier that can be tackled at a low cost, and noted when shipping low value goods such as apparel, supply chain barriers can be expensive.
In Madagascar, the report shows, barriers can account for up to 4 percent of total revenues of an apparel producer through higher freight costs and increased inventories, “eroding the benefits of duty-free access to export markets,” and its competitive status due to lower labor costs — the country’s minimum wage is $35 a month, compared to $53 in India and $155 in China.
“Madagascar’s border administration procedures present operational problems that result in significant delays,” the report notes.
Such supply barriers, it adds, limit Madagascar’s apparel companies’ access to some of the apparel industry’s most lucrative markets, such as the fast-fashion segment, which has an annual growth rate of 14 percent and now accounts for almost 20 percent of the apparel market.
“With inventory turns every two to eight weeks, fast fashion companies like Zara and H&M depend critically on reliable deliveries,” it said.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty